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How self-employed can avoid penalty under presumptive taxation

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Unorganised sector constitutes approximately 92% of the employed people and around half of India’s GDP.

It mainly comprises household manufacturing activity and small scale and tiny sectors of the industry. Such businesses cannot afford a well set financial and accounting system.

Taxing of unorganised sector under direct tax

Reluctance of maintaining regular books of account was proving to be a big hindrance in inducing people to file tax returns. Hence, the government took an important step of a simple presumptive tax regime for the unorganised sector. Under this, eligible taxpayers opting for such scheme can calculate the profit based on certain percentage of their turnover, rather than maintenance of complete set of books of accounts.

A taxpayer having turnover in business up to Rs 2 crore can compute his profit at the rate of 8% of cash turnover. In order to encourage digital economy, for receipt through banking channel, this percentage is reduced even further to 6% of the turnover. A taxpayer having professional receipts up to Rs 50 lakh can compute his profit at the rate of 50% of gross receipts.

For a person carrying business of plying/hiring/leasing of goods carriage and owning not more than 10 trucks, an option is given to compute business profit at the rate of Rs 1,000 per tonne per truck for every month in case of heavy goods vehicle and Rs 7,500 per truck per month for other goods vehicle.

The above presumptive taxation gives a lot of relief such as saving time in maintenance of books of accounts, accountant cost, compliance cost, etc.

Further, persons opting presumptive schemes can file a concise three to four pager ITR form with minimal but a few mandatory fields (that is, amount of debtors, creditors, cash/bank balance and stock as on last day) as compared to a 30+ pager ITR in other cases.

Though taxpayers are not required to maintain regular books of accounts under presumptive taxation, they are expected to keep following conditions in mind to avoid penal consequences:

Not to accept or repay any loan or deposit in excess of Rs 20,000 in cash: If a person accepts or repays a loan in cash in excess of Rs 20,000, penalty equal to the amount of loan received or repaid can be levied.

Not to receive cash of Rs 2 lakh or more: Receipt of Rs 2 lakh or more in cash from a person in a day or for a single transaction or single event may result into a penalty equal to the amount received.

Recent increase in tax rebate has made taxpayers earning taxable income up to Rs 5 lakh pay nil tax. Taking presumptive tax rates into account, it can be seen that individual/HUF (Hindu Undivided Family) taxpayer having business turnover of Rs 62.50 lakh in cash or Rs 83 lakh through banking channel will not have to pay any tax.

Similarly, individual having professional receipts up to Rs 10 lakh will not have to pay any tax. It should be noted that if presumptive income is above Rs 2.5 lakh, then tax payer is required to file return though no tax is payable.

GST provisions for unorganised sector

Registration: Threshold limit prescribed for registration under the Goods and Services Tax (GST) is Rs 20 lakh and for north-eastern states, it is Rs 10 lakh. This limit is proposed to be increased to Rs 40 lakh for goods.

Composition scheme: Manufacturers, small traders and restaurants having turnover up to Rs 1 crore are entitled to opt for composition scheme. Tax rates are 2% for manufacturers, 1% for small traders and 5% for restaurants. However, they are not entitled to any credit of input tax. Composition dealers cannot charge GST to their customers. Composition scheme is not available for dealers engaged in inter-state trade and commerce.

Return filing: Small taxpayers with annual aggregate turnover up to Rs 1.5 crore are permitted to file GSTR 1 on quarterly basis whereas others have to file this return monthly. In addition, all taxpayers have to file annual return.

Thus, it can be seen that the government has relaxed provisions under both income tax and GST. Compliance burden has been substantially reduced. This should go a long way in encouraging small tax payers to comply.

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Nisha Shiwani hails from the pink city of Jaipur and is a prolific writer. She loves to write on Real Estate/Property, Automobiles, Education, Finance and about the latest developments in the Technology space.



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Finance

‘One Belt One Road’ (OBOR): An external challenge to India’s economy and security

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In recent times China has emerged as a strong player in this new unfolding global system.

It has launched a new initiative called One Belt and One Road initiative. The aim of the OBOR project is to create an economic land belt and marine link to redirect  Chinese capital to develop infrastructure and trade capacity of ASEAN, Europe, Central Asia, and Africa.

The concept of OBOR is based on certain principles where the broad aim is to establish multi-dimensional and multi-tiered connectivity to tap the market potential of the region’s leading countries to aggressively undertake job creation and promotion of consumption. It has the plan to involve more than 60 countries in the project and also plans to negotiate a free trade agreement with all of them, the entire OBOR.

OBOR

 

OBOR, CPEC, String of Pearls

China Pakistan Economic Corridor (CPEC)

The China –Pakistan relations, over a period of time, have evolved to the extent that some scholars aptly call Pakistan, China’s Israel. Today, china clearly believes that Pakistan has a core part to play in its transition to global power and lies at the heart of China’s plan for ports and railways and for oil and gas. The CPEC comes at a time of growing geopolitical ambition of china, being partly a strategic gambit. One of the important aims of CPEC is to bolster the Pakistani Economy by addressing the Key infrastructure constraints in Pakistan.

CPEC as a subset of OBOR

In March 2015, China’s National Development and Reform Committee announced the OBOR initiative. The CPEC is part of OBOR and was formalized in April 2015 between Pakistan and China. This concluded with around 51 memorandums of understanding with a total investment of 46 billion dollars. CPEC has emerged out of the Chinese principle of co-operative mechanism with different parts of the world to increase its trade. It has identified the China-Pakistan Economic Corridor and Bangladesh-China-India–Myanmar(BCIM-EC) as the key initiatives broadly associated with OBOR.

India’s official position is that CPEC passes through the Pakistan Occupied Kashmir(PoK), which is a disputed territory, and land that has been illegally occupied. India asserts that China has not shown any understanding of India’s sovereign claims and thereby it will not be part of the OBOR. Again for India, OBOR is a national initiative of China to enhance its connectivity all over to ensure that it is able to sustain its low-cost manufacturing programme which is declining due to rising domestic wages in China. This is by integrating itself to global value chains.

India has now to decide whether it would allow political differences to prevail over economic interaction.

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Business

First ATM installed at more than 11000 feet above sea level at Kedarnath

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The Uttarakhand chief minister of the double engine government Trivendra Singh Rawat has today inaugurated the ATM service at the historic Kedarnath Shrine precincts at more than 11000 ft altitude, after it was washed away in the massive ecological disaster of June 15. This is the only ATM in the entire Kedarnath valley.

Thanks to the untiring efforts and dedicated commitment of Uttarakhand government for having taken the pains to finally to get the ATM installed at the ancient Kedarnath Shrine after protracted five years, where more than two lakh pilgrims and tourists visit every season to pay their revered obeisance to Baba Kedarnath in His historic shrine established centuries ago.

Even the prime minister Narendra Modi visited this Kedarnath about four to five times after the dreaded ecological disaster for paying obeisance to Lord Shiva at Kedarnath and also directed the state government to expeditiously carry out the reconstruction work in the Kedarnath Dham precincts.

A massive budget was also allocated for the complete facelift of this historic shrine.

If we measure the approximate number of visitors at this historic shrine taking an average of one lakh visitors every season, the figure would come to more than five lakhs.  One can imagine how much inconvenience the visiting pilgrims were confronting in the absence of an ATM. The earlier available ATM was washed away in the heavy deluge on June 15/ 16 2013 that killed thousands of pilgrims from all over India who’d converged for Lord Kedar’s darshan.

We remember the news of this ATM being damaged due to the high-velocity tides and currents and of the deluge of the Chora baari lake also known as Gandhi Sarovar in June 2013.

On the day of this deluge and afterward, wads of notes were seen floating far away in the river which was finally picked up by some Sadhus who tried to siphon them off clandestinely but were caught carrying the wads of notes collected by them floating in the water.

Finally, the government of Uttarakhand realized this inconvenience to pilgrims and opened the only ATM at Kedarnath Shrine. The chief minister Trivendra Singh Rawat jubilantly inaugurated it. Better late than never, after more than five years in 2019 we have the ATM again after it was washed away in 2013.

In a tweet, today along with the pictures of inauguration of this new ATM the chief minister Trivendra Singh proudly tweeted: Harsh ka vishay hai ki Kedarnath Dham mein pehla ATM aaj se shuru ho gaya hai. @ HDFC _Bank dwara sthapit ATM se shradhaluon ko badi raahat milegi. 2013 ki aapda mein Kedarnath mein maujud ATM bah gaya tha.

Matter of pleasure to announce that a first ATM has been installed at Kedarnath shrine. The HDFC ATM will be of immense help to pilgrims. In 2013’s disaster the Kedarnath ATM washed away in the deluge.

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Business

Dr. Ashutosh Karnatak is the new CMD of GAIL ( India) Ltd

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Dr. Ashutosh Karnatak, new CMD of GAIL ( India) Ltd
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Gas Authority of India Limited with its headquarter based in New Delhi’s Bhikaiji Cama Place has nominated its new Chairman Cum Managing Director. Dr. Ashutosh Karnatak earlier serving as Director project GAIL since 2014 has today taken over charge as the new CMD of this highly profit-making organization. The earlier CMD Mr. Tripathi has retired.

Mr. Ashutosh Karnatak carries behind him a rich experience of 37 protracted years in the hydrocarbon sector and is also concurrently serving as Director ( Projects) in GAIL.

As per the financial projections till February 2019 the state-owned gas distribution company GAIL ( India) Limited jumped in the third quarter profit beating market estimate, buoyed by a surge in revenue from its natural gas marketing segment says a TOI report published in February. According to the report, the profit for the quarter ended then on December 31 last came to a whopping 16.81 billion rupees i.e. 234.32 million dollars compared with a profit of 12.62 billion rupees last year as per the GAIL’s projections.

According to the Refinitiv Eikon data quoting TOI report sixteen analysts on average estimated the company, which also engages in the transmission of petrochemicals and liquefied petroleum gas, posted a profit of 15.51 billion in a quarter.

The TOI report of Feb 2019 further says that GAIL’s revenue from operations surged 37.3% to 197.89 billion rupees. Similarly, it’s gas marketing segment which accounts for more than 3, 4th of the total revenue enhanced to a whopping 46%.

Along with Dr. Ashutosh Karnatak who took charge as CMD GAIL, Dr. Kulbhooshan Baluni also took charge as Director IIM Kashipur and Professor Padhy as Chairperson of IIM Kashipur Campus, Dun today. Mr. KC Pandey of Awaj Suno Pahadon ki and Uttarakhand Journalists Forum extended their heartiest congratulations to all of them for their enlightened future.

Dr. K. C Pandey a renowned entrepreneur of Uttarakhand and social activist congratulated Dr. Karnatak on assumption of the charge as new CMD GAIL at his Bhikaiji Cama place office by presenting a bouquetin person.

A post-graduate from IIT Delhi Karnatak graduated in electrical engineering from HBTI Kanpur. He is credited for developing an innovative project monitoring and controlling technique ARJUNA and a capability-building model. He accompanies with him a 39 years experience in Oil and Gas sector who joined GAIL in 2014 and reached its top slot just in a span of 4 and a half years.

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Finance

Benefits of filing ITR (Income Tax Return) even if you are below taxable limit

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ITR Receipt is an important document
Having an ITR receipt is important because it is more detailed than Form 16, entailing your income and taxation along with revenue from other sources.

Use as address proof
ITR receipt is sent to your registered address, which can serve as residential proof.

Helps the bank loan documentation process easier
Being a diligent income tax filer makes it easier for banks to assess your source of income when you apply for loans like an auto loan, home loan, personal loan, etc.
“Banks usually ask for copies of tax returns filed for previous 2-3 years at the time of applying for the loan to ascertain the income capacity of the individual. Hence, to apply for loans a tax return would be required to be filed”.

Avoid penalties or scrutiny from the tax department
From FY 2017-18, up to INR 10,000 would be levied for non-filing of ITR. This black mark will remain for years to come.

For a hassle-free visa application procedure
At times visa authorities ask for copies of past tax returns, hence to apply for a visa a tax return would be required to be filed. Embassies, especially those of US, UK, Canada, etc. when processing your foreign visa application, are particular about your tax-compliance.

To buy an insurance policy with a higher cover
If insurance companies have reasons (non-compliance) to believe that you are a tax-evader, they will not give you policies with more cover.

Refund
When employed, your employer will deduct TDS on your income. However, if you have made investments that are tax deductibles, it reduces your taxable income. So, the TDS deducted can be refunded, but only if you file your return. The same holds true for TDS deducted by any other sources.

Makes life easier for freelancers and independent professionals
Freelancer or self-employed people don’t have Form 16. This is the only document they have to show that he has filed the ITR. Without this, they can face funding issues and transactional problems.

Government tender
Experts say that if one plans to start their business and need to fill a government tender or two for the same, they will need to show their tax return receipts of the previous five years. This again is to show your financial status and whether you can support the payment obligation or not.
However, this is no strict rule. It may vary depending on the internal rules of the government department. Even the number of ITRs required can vary.

Credit Card Processing
Banks can reject your credit card application if you haven’t filed your ITR.

Compensate losses in the next financial year
Unless you file the ITR, you cannot recompense your expenses/losses in the previous financial year to the current. As per the income-tax provisions, if tax returns are not filed on time, unadjusted losses (with some exceptions) cannot be carried forward to future years. Hence, to ensure that the losses are carried forward for future adjustment, a tax return would be required to be filed.

Helps to avoid extra interest
If you don’t file ITR, the belated return could lead to extra interest at 1% per month for the remaining tax payable by you. For example, banks would deduct tax from interest on fixed deposits exceeding a certain threshold. To claim a refund of tax deducted by the bank (if any) on the interest income, a tax return would be required to be filed regardless of the taxable income.

This helpful article curated from the web.

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Business

Have we registered our brand name yet?

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The brand name is the very soul of the company. With the rise in the number of brands in India, the likelihood of the brand name being stolen has increased. Therefore, it is high time that we take measures to protect our brand name through Trademark registration.

Why we should consider trademark registration?

1. Because the brand name is the very identity of our product or service.
2. Because a brand name makes the customers recognize our product among many.
3. Because with trademark registration, we can deter the infringers from stealing our mark.
4. Because trademark registration gives a monetary value to our mark
5. Because trademark registration opens the door to business expansion through licensing.

This important article curated from the web.

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Finance

It’s a pro people budget says PM Modi

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PM Modi praising the budget
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Prime minister Narendra Modi has praised the first budget presented by the fimnance minister Dr. Nirmala Sitaraman after the formation of the NDA 2 government, terming it as prosperous which makes every person of the country self reliant.

Prime minister Narendra Modi in a vedio posted in his twitter handle said that the budget would strengthen the poor of the country and accord the youth an enlightened and prosperous future.
He also ensured that the budget will provide the people of the middle class progress and prosperity.
Terming it as a development oriented budget prime minister Narendra Modi added that not only will the budget simplify the tax structure but will also lead to modernisation of the infrastructure.
Praising his new governments first tenure  prime minister Narendra Modi said  that the people of the country and their lives have tremendous expectations from his government and this budget is very much in tune with their assumptions and expectations assuring them fully that their every demand would and expectations would be fulfilled.
It’s give the assurance that its in a right direction and speed and is therefore all set to achieve  the true objectives.
He said that this budget would strengthen the industries and the industrialists/ entrepreneur and enterpreneurships, both and also enhance the process of women’s participation in the development process of thr country.
Extremely satisfied and jubilant over the new budget, prime minister Narendra Modi called it a green budget in which the environmental, electric mobility and solar sectors were promptly and especially encouraged.
He  said that the previous government under his five year tenure has left behind environment of  pessimism behind  and is all set to move forward  with immense optimism and confidence.
The budget however has increased excise of one rupee each on the petro diesel products, enhanced  2.5 percent tax on silver and gold with additiinal cess on tobacco products.
However on the purchase of a house worth Rs 45 lakhs it has given tax relief on the amount of 3.5 lakh rupees but the middle class got no relief on annual tax exemption.
The income tax limit of five lakh exemption granted in the vote on account budget before the elections however stands applicable with no tax on the yearly income of Rs. five lakhs.
The tax has also been enhanced on the annual income above three and five crores to 3% and 5% respectively.
The Bahujan Samaj Party  and Congress party have severely criticized the budget.
The BSP president Mayawati termed the budget of Modi government as the one implemented for encouraging crony capitalism and crony capitalists including the private sector of the country leading to further  enhancing the problems relating to unemployment, inflation, poverty, farmers n ruler distress of the poor, marginalised classes, the dalits and the toiling masses of the country.
This budget is anti poor which restricts the economic development of the country added Mayawati in her tweet.
The  chief spokesperson of Congress party Randeep Singh Surjewala also criticized the Budget 2019 severely, saying that during the last five years during the Modi government tenure, the excise duty of diesel  has been increased by 443% and on petrol by 211%.
By this way his government has earned Rs 13, 00, 000 crores by cutting the pockets of the common men. Now Modi 2.0 has sprinkled petrol like pouring  ” salt on the burned injury”.
The budget has by increasing Rs. 2 as excise on petrol and diesal literally broken the backbone of the middle class, farmers and the common men of the country.
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Business

DPIIT summons food aggregators like Zomato, Swiggy over predatory pricing

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The Department for Promotion of Industry and Internal Trade (DPIIT) has summoned food aggregators including Swiggy, Zomato, Foodpanda and Uber Eats over restaurants complaint of them engaging in deep discounting. The dispute between restaurants and food aggregators has been going one for almost a year.

DPIIT has called meeting to resolve offline restaurant concerns, which is quite similar to what offline retailers had with e-tailers, said an official aware of the development.

The meeting will be attended by food aggregators and restaurant associations, including the Federation of Hotel & Restaurant Associations of India and National Restaurant Association of India. It will be chaired by DPIIT secretary, Ramesh Abhishek.

Govt will try to address the restaurants issues through mutual discussion and find equal growth opportunity for the industry, reportedly said officials.

Commerce and industry minister, Piyush Goyal, had earlier warned e-comm firms, in almost similar cases, to avoid hurting small businesses through their predatory pricing practices. Goyal had categorically said that the government will not allow small retailers and kirana shops to be wiped out.

The restaurant associations have time and again complained against food aggregators harming their business through making consumers discount addicts.

Two months ago, restaurants had complained, about the impact of deep discounting offered by food aggregators, on their business. Through predatory pricing food aggregators are forcing restaurants to drop prices, restaurants said.

Food aggregators have also indulged in running their own private labels, who are eating away their businesses and using consumer behaviour data to consolidate their business, they added.

In January, over five hundreds of restaurants had complained to the CCI.

 

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Business

Delhi High court restrains Hotelier Association from calling for ban on Oyo Rooms

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The Delhi High court has restrained the Hotelier Welfare Association from issuing any notices to hoteliers and service providers calling for a ban on or seeking to boycott the hotel services provided by Oyo Rooms.

The ex-parte interim injunction order was passed by a vacation Bench of Justice Jayant Nath in a suit by the owner of Oyo Rooms, Oravel Stays Private Limited (plaintiff)  against the Hotelier Welfare Association (defendant).

The Court was informed that the plaintiff is in the business of standardizing unbranded budget hotels, bed and breakfast and guesthouses through online and offline channels.

It was further explained that the plaintiff enters into business arrangements with the service providers or hotelier, in which the service provider or hotelier permits the plaintiff to have full control over pricing, booking brought in by the hotel, publishing room tariffs on its website and/or mobile application at any point in time etc.

It was the plaintiff’s grievance that the defendant had been illegally conspiring and colluding with other similar hotelier associations such as Budget Hotel Association of Mumbai to coerce the plaintiff into submitting to their unwarranted, illegal demands.

Pursuant to the various statements, notices/letters issued by the defendant, several hoteliers had expressed their apprehension in continuing their business-relation with the plaintiff, the Court was further informed.

The Court also perused one such notice allegedly by defendant association, calling upon all hotels to support a nationwide protest against OYO by boycotting and blocking OYO rooms from June 20.

The conduct, the plaintiff argued, had halted its business and could also potentially impact more than 1,35,000 bookings across India.

It was also pointed out that the defendant was earlier the business partners of the plaintiff but have now formed an association and have been acting against the plaintiff.

After hearing the plaintiff, the Court concluded that a prima facie case had been made out against the defendant for an ex parte injunction order.

The Court thus restrained the defendant from issuing notices or calling other hoteliers/service providers to boycott the plaintiff in any manner whatsoever till further orders.

Oyo Rooms was represented by Senior Advocate Neeraj Malhotra, briefed by a team of Advocates from IndusLaw Sandeep Grover, Mohit Chadha, Pankhuri Bhardwaj, Tarang Aggarwal, and Kshitij Parashar.

  1. The matter will be heard next on August 8
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Business

Mindtree gives three board seats to L&T, Subroto Bagchi resigns

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Mindtree’s board has appointed three L&T senior leaders including chief executive officer and managing director executives S N Subrahmanyan. Engineering major L&T, whose target is to up its stake in the mid-tier IT services companies to more than 66%, has got three seats on Mindtree’s board.

The Board of Directors and the Nomination and Remuneration Committee on Thursday approved the appointments of S N Subrahmanyan, J D Patil, Senior Executive Vice President for L&T’s defence business and Ramamurthi Shankar Raman, chief financial officer, L&T as non-executive directors, the company said in a filing.

These appointments will be effective July 16 subject to shareholders’ approval.

Co-founder Subroto Bagchi has resigned from Mindtree’s board. The company said Bagchi, who is retiring on July 16, did not offer himself a reappointment.

The Bengaluru-headquartered IT firm has also approved the appointments of Prasanna Rangacharya and Deepa Gopalan Wadhwa as independent directors on the board.

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Business

Paytm to dole out incentives for merchants at kirana stores

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In a move to make deeper inroads in the country, digital payments company Paytm on Thursday announced to push cashback from peer-to-peer UPI transactions to offline merchant payments at retail kirana stores.

The company is aiming to partner with almost 20 million retail kirana stores, enabling them to accept all digital payment modes including UPI, wallet and cards.

“Paytm will invest money in offline merchant expansion instead of driving incentive led P2P transactions. Our offline merchants create high-frequency usage and an important use-case for Paytm consumers,” said Deepak Abbot, Senior Vice President, Paytm.

UPI P2P payments are mostly done by users to receive‍ some extra money. On Paytm, the UPI users are already the ones who have been using a large host of Paytm services for a long time and don’t nerd cashbacks to make payments.

“To further help merchants get better access to capital and provide more financial security Paytm will invest on lending and insurance, rather than on P2P payments,” the company said in a statement.

Through its payment ecosystem, Paytm has already created a network effect with over 5 billion transactions in 2018-19.

It also claims to have 12 million merchant partners accepting payments through Paytm QR, which accepts all digital payment instruments like UPI, wallets, cards and netbanking.

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